The Game Between Creators and Buyers in the NFT Market Originate from Choosing a Trading Model
What is NFT
The full English name of NFT is Non-Fungible Token, which is indivisible, irreplaceable and unique.
NFT can be bound with some commodities in the real world because of its non-homogeneous and inseparable characteristics. In other words, it is actually a digital asset issued on the blockchain. This asset can be game props, digital artworks, tickets, etc., and is unique and non-reproducible. Because NFT has natural collection properties and is easy to trade, crypto artists can use NFT to create unique digital works of art.
Common transaction modes of NFT
Looking at the major NFT trading markets, we can summarize some popular trading modes:
Buy now
In the immediate purchase mode, the seller sets a price, and then the buyer purchases directly at this price. The immediate purchase is the buy it now mode. There is no bargaining link. Generally, the seller dominates the price and the buyer passively accepts it. It is the most common mode. The advantage of this model is that the buyer can buy directly and the seller can sell directly. The disadvantage is that there will be great differences in pricing, resulting in poor liquidity
Auction mode
In the auction mode, the seller sets a minimum acceptable price, and then allows the buyer to bid, and the higher price is awarded within the set time period. This model gives buyers a certain degree of freedom and is more conducive to value discovery. For underestimated NFTs, a fair price will be obtained through the auction model.
Inquiry mode
In the Inquiry mode, the buyer initiates a price to the NFT owned by the seller. If the Seller agrees to the price, the NFT closes. In this mode, the buyer dominates the price, but the final option is still the seller. The purchase mode gives the buyer the ability to negotiate downward (the auction mode can only be added but not reduced), that is, bargaining in real life.
Mystery box mode
The mystery box mode is also an immediate purchase mode, but the specific NFT is not known in advance. It is generally used for the distribution activities of NFT publishers.
NFT radical market trading model
NFT radical market trading mode is a new NFT trading mode. It is a new trading idea based on the radical market concept.
NFT under the radical market mode is in an eternal transaction. As long as someone bids, it can be purchased without the consent of the current holder. It is equivalent that NFT does not belong to anyone and anyone can only keep the current NFT.
Compared with the original chain radical trading mode, users need to deposit a certain margin, and your selling price also depends on the amount of margin. If you want to sell higher, the more margin you need to deposit. Margin is the cost you pay for the selling price, because the infinitely high selling price will pay a high holding cost to keep NFT in a more reasonable price range rather than a false bid price.
Radical transactions on Bytom blockchain are also divided into immediate purchase and inquiry modes:
Buy immediately, that is, the seller bids, and the buyer buys directly at this price, but the buyer needs to set a selling price and deposit a certain deposit at the same time
Inquiry mode, that is, the buyer’s bid (generally lower than the current selling price), the seller agrees or disagrees, and the buyer still needs to deposit a margin and set the selling price
Examples of NFT radical market transactions
Assuming that to purchase an NFT worth 60 BTM as above, the buyer needs to pay a purchase price of 60 BTM, and at the same time set a selling price of 100, an additional 10 BTM deposit is required.
For the seller, the amount paid by the seller was 60 BTM, and the deposit was returned 6 BTM
For buyers, they need to pay a quantity of 60 BTM and add a deposit of 10 BTM
If the NFT is bought by the next buyer, then the previous buyer will receive 100 BTM, deducting 2% of royalties and 1% of platform fees, and finally get 37 BTM.
Advantages of NFT radical market trading
1. Promote the efficiency of NFT transactions
The traditional NFT market uses bidding for transactions. Sellers bid high prices and buyers bid low prices. It requires repeated games between the two parties to reach a transaction, and the transaction efficiency is low.
Through aggressive transactions, NFTs are in transactions all the time, and sellers invest a certain cost in exchange for better liquidity
2. Better NFT price discovery
In traditional NFT pricing, sellers tend to increase the price, while buyers tend to obtain it at a low price. For a piece of NFT pricing is vague, its market value cannot be formed quickly.
Bytom’s radical transaction introduces a margin model. For sellers, setting an excessively high price means paying more margin, but the margin is actually not profitable, which means paying time and opportunity costs. Of course, if the price is too low, it will be quickly taken away by the buyer, so the seller will tend to choose a more reasonable price.
3. Creators can get royalties multiple times
In the traditional market, creators only get the proceeds of the initial issuance during the transaction process, and no amount of follow-up transactions will be shared with the creator.
Radical transactions can allocate a royalty to creators for each transaction, so that creators can continue to receive income from subsequent transactions, thereby incentivizing creators to create better and more works.
